What are Visa's VAMP Rules?
Visa is introducing the Visa Acquirer Monitoring Program (VAMP) starting April 2025, consolidating their fraud and chargeback monitoring into a single, unified program.
Key Points of VAMP:
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Unified Fraud & Chargeback Monitoring
- Visa previously managed fraud and chargeback monitoring under separate programs.
- Under VAMP, both are merged, meaning total dispute activity (both fraud and non-fraud) impacts a merchant's compliance status.
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New Dispute Thresholds
- Merchants will have stricter dispute thresholds to maintain compliance.
- Starting April 2025:
- Merchants must actively control dispute ratios below set thresholds, or face increased monitoring, fines, or other compliance actions.
- Initially, the threshold details haven't been widely publicized yet, but businesses must now count all disputes combined toward these ratios.
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Impact on Rapid Dispute Resolution (RDR)
- Previously, disputes resolved proactively via RDR did not count toward chargeback ratios.
- Under VAMP, RDR cases will now count toward overall dispute ratios.
- This removes merchants' ability to use RDR to keep dispute ratios artificially low.
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New Challenges for Merchants
- Subscription-based services, digital goods merchants, and businesses categorized as high-risk face heightened scrutiny and potential increased compliance costs.
- Such businesses must now enhance their dispute-management processes and customer communication practices.
Implications for Merchants:
- Merchants will need:
- Stronger fraud prevention and detection methods.
- Enhanced customer communications and clearer billing practices.
- Better management of customer relationships, especially for subscription and recurring billing models.
- Failure to adapt could lead to increased compliance costs, fines, or higher merchant category risk ratings.
Strategic Recommendations for Businesses:
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Review & Strengthen Internal Processes:
- Invest in comprehensive fraud prevention tools.
- Update terms and conditions clearly, ensuring transparency in billing.
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Proactive Customer Engagement
- Increase communication and make refund or cancellation policies simpler and clearer.
- Encourage customers to resolve issues directly, minimizing disputes.
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Review & Optimize Dispute Handling
- Develop efficient processes to handle disputes promptly and professionally.
- Leverage data analytics to identify dispute trends and address underlying causes.
Conclusion:
Visa’s VAMP represents a shift towards heightened compliance requirements that will demand proactive, comprehensive risk management from every merchant, particularly those with higher dispute exposure.
Your Next Steps:
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Assess Current Processes:
Immediately audit your current fraud monitoring and chargeback management procedures. -
Invest in Prevention:
- Upgrade fraud detection software.
- Provide staff training focused on dispute mitigation.
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Communicate with Your Acquirer:
Clarify how these rules specifically impact your industry and business model, ensuring you're prepared ahead of April 2025.
